DCIT CENTRAL CIRCLE-32, NEW DELHI V. VIKRAM KUMAR BAJAJ, NEW DELHI

ITA 1737/DEL/2023

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A), which pertained to the Assessment Year 2017-18. The Revenue challenged the deletion of a protective addition of Rs. 65,35,57,000 made by the CIT(A). This protective addition was based on findings from a search and seizure operation conducted by the Income Tax Department at various premises of the 'Bajaj Group', including the residence of the assessee, Sh. Vikram Kumar Bajaj. The operation uncovered incriminating documents and digital evidence suggesting involvement in illegal 'satta' or election betting. The AO made several additions to the assessee's income based on these findings, which were contested in the CIT(A) and subsequently led to this appeal by the Revenue.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825233 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 01-06-2023
• Other Referred Cases: Lalji Haridas Vs. ITO 43 ITR 387 (SC), 1961, CIT, Gujarat II Vs. Surendra Gulab Chand Modi 140 ITR 517 (Guj) 1983
• Laws Referred To: Section 153A, Section 131, Section 132(4)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR
• Assessee Lawyers: VED JAIN
• Keywords: Question of law; Search and seizure; Loose papers
• Section: 153A; 131

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, “G”, BENCH, DELHI BEFORE: SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI. KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No. 1737/Del/2023 Assessment Year : 2017-18 The DCIT Central Circle-32, New Delhi Vs. Shri Vikram Kumar Bajaj RNB House, 1, Shivaji Enclave, Main Road, Rajouri Garden, Near Raja Garden, West Delhi PAN NO: ACXPB6203D Appellant Respondent Assessee by : Shri Ved Jain, Advocate Shri Pawan Garg, C.A and Ms. Ishika Dua, C.A Revenue by : Shri Mahesh Kumar, CIT(DR) Date of Hearing : 22/09/2025 Date of Pronouncement : 30/12/2025 Order PER KRINWANT SAHAY, A.M: This is an appeal filed by the Revenue against the order of the Ld. CIT(A), New Delhi dt. 22/03/2023 pertaining to Assessment Year 2017-18. 2. In the present appeal Revenue has raised the following grounds: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 65,35,57,000/- made by the AO ignoring the ratio decided and laid down by the Hon’ble Supreme Court in the case of Lalji Haridas Vs. ITO 43 ITR 387 (SC), 1961.” And Hon’ble Gujarat High Court in the case of CIT, Gujarat II Vs. Surendra Gulab Chand Modi 140 ITR 517 (Guj) 1983 wherein it is held that such ‘Protective Assessment’- which in law should be allowed to remain as such – till the matters attain finality by Superior Courts- High Court or Hon’ble Supreme Court. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in proceedings with the matter and in disposing of it instead of blocking it till the final disposal of matter by the Superior Court i.e. Supreme Court or High Court. 3. The order of the CIT(A) is erroneous and is not tenable on facts and in law. Printed from counselvise.com 2 3. Briefly, the facts of the case are that a search and seizure operation was conducted by the Income Tax Department on 20/04/2017, at various premises of the \"Bajaj Group,\" which included the assessee, Sh. Vikram Kumar Bajaj. During this operation, various incriminating documents, books of accounts, and digital evidence were seized, and statements were recorded. The assessee, an individual and proprietor of M/s Vikram Industries, had originally filed a return on 22/03/2018, declaring an income of Rs.7,50,080/-. Following the search, a notice under Section 153A was issued, to which the assessee initially raised objections regarding jurisdiction and the validity of the notice. The AO noted that the assessee was repeatedly non-cooperative, frequently changing authorized representatives and requesting documents that had already been provided multiple times to delay the proceedings. Consequently, the assessment was finalized on its merits based on the material available on record. 3.1 The primary finding of the AO involved undisclosed income from illegal \"satta\" or election betting. The AO discovered loose papers in a pocket diary at the Bajaj Group's corporate office containing code names and amounts owed by various individuals. The handwriting on these documents was identified as belonging to Sh. Vikram Bajaj. The AO linked these entries to professional bookies, such as \"Chotu Bansal,\" and identified a contact \"KKS\" as Shri Kamal Kishore Sarda through seized digital data. The AO found that payments were accepted at secretive locations across New Delhi rather than at official business premises, indicating the winnings were from illegal activities. These findings were corroborated by widespread news reports and police actions in Jaipur and Bikaner, which detailed a multi-crore betting racket involving hundreds of crores of rupees placed on the 2017 Uttar Pradesh State Legislative Elections. The AO concluded that the entries in the seized diary represented settled accounts and outstanding winnings from these betting activities. Printed from counselvise.com 3 4. Against the order of the AO the assessee went in appeal before the Ld. CIT(A). In the appellate proceedings for the Assessment Year 2017-18, the Ld. CIT(A) -30 addressed several significant findings regarding the assessment of Sh. Vikram Kumar Bajaj. The Ld. CIT(A) reviewed the case following the Assessing Officer's assessment, which had significantly increased the assessee's income from a returned income of Rs.7,50,080/- to an assessed income of Rs.80,15,76,080/- on protective basis. Key findings by the CIT(A) related to the following additions made by the AO: • Protective Addition from Seized Loose Papers: The CIT(A) examined a protective addition of Rs.65,35,57,000 based on loose papers seized from RNB House, Shivaji Enclave. The assessee had challenged this, noting that although the papers were seized from a premise where he was present, no specific queries regarding these documents were raised during his statements recorded under section 131 or 132(4) at the time of the search. • Undisclosed Income from Election Betting: The AO had made a substantive addition of Rs.8,40,00,000 based on loose papers (Exhibit 12) alleged to have been seized from the assessee's residence. The CIT(A) considered the assessee's objection that the search team found no incriminating material during the search and that the documents were misinterpreted as being linked to illegal \"satta\" or betting activities without proper corroboration. • Addition on Property Sale: A protective addition of Rs.6,32,69,000 was made concerning a property sale to Smt. Santosh Khanna. The CIT(A) looked into the AO's findings, which the assessee contended were based on mere surmises and lacked independent enquiry or a fair opportunity for rebuttal. • Procedural and Jurisdictional Validity: The CIT(A) also deliberated on the assessee's procedural challenges, including the validity of the search warrants, the jurisdiction of the AO, and the legality of reissuing notices under Section 153A. The assessee argued that the search at certain premises was conducted Printed from counselvise.com 4 without valid warrants and that the overall assessment was framed in violation of statutory procedures. 5. During the course of hearing the Ld. DR relied on the order of the AO. 6. The Learned AR argued that the protective addition cannot survive because the substantive addition in the case of Mr. Ram Narayan Bajaj (ITA No. 1090/DEL/2023) has been quashed by the Hon'ble Tribunal. The AR contended that the assessment in that case was held to be bad in law due to the absence of valid approval under Section 153D. The AR further submitted that a protective addition presupposes the existence of a substantive addition; if the substantive addition is quashed or does not survive, the protective addition must also be deleted. To support this, the AR relied on various judicial precedents, emphasizing that an appellate authority is duty-bound to determine the real owner of the income rather than leaving the issue undecided. 7. We have carefully considered the submissions and the judicial precedents cited. It is undisputed that the substantive addition in the case of Mr. Ram Narayan Bajaj was quashed by this Tribunal in ITA No. 1090/DEL/2023. It is a well- settled legal principle that when a substantive addition does not survive, the protective addition also cannot be sustained. 7.1 In reaching this conclusion, we refer to the following applicable judgments: • Ramesh Chand Prem Raj Soni (HUF) vs. ACIT [IT(SS) Appeal No. 51 (Jodh.) of 2004]: The Tribunal held that when a substantive addition is struck down (in that case, for being time-barred), the protective addition—which presupposes the existence of a substantive addition—cannot survive. • Kanav Metals vs. ITO [ITA No. 7778/Del/2019]: The Delhi Bench followed the aforementioned Jodhpur Bench decision, affirming that since the Printed from counselvise.com 5 substantive addition did not survive due to being time-barred, the protective addition in the hands of the assessee firm also did not survive. • Pr. CIT vs. Electrical and Electronic India Ltd. [2023 (11) TMI 657 - ITA 595/2023]: The Hon'ble Delhi High Court held that no substantial question of law arises when a protective addition is dropped following the deletion of the substantive addition on its merits. • Lalji Haridas vs. ITO [43 ITR 387]: While the Supreme Court allowed for simultaneous proceedings at the initial inquiry stage to determine the responsible taxpayer, it noted that if one party is finally held liable, it may not be necessary to make an order against the other. • Prakash Wine Agencies vs. ITO [1990 (3) TMI 99]: The ITAT Allahabad Bench held that an appellate authority cannot evade the determination of who the real owner of the income is, even in cases of protective assessment. Since the substantive assessment in the case of Mr. Ram Narayan Bajaj has been quashed, the protective addition in the hands of the assessee, Vikram Kumar Bajaj, has no legal legs to stand on. Consequently, we uphold the order of the CIT(A) and delete the protective addition. 8. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 30.12.2025 Sd/- Sd/- (ANUBHAV SHARMA) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER AG Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Assistant Registrar ITAT, NEW DELHI Printed from counselvise.com "